Global| Dec 14 2018U.S. Business Inventory Accumulation Picks Up
by:Tom Moeller
|in:Economy in Brief
Summary
Total business inventories increased 0.6% (5.1% y/y) during October following two months of 0.5% gain. Total business sales rose a steady 0.3% (8.0% y/y). The inventory-to-sales ratio increased minimally to 1.35, but remained below [...]
Total business inventories increased 0.6% (5.1% y/y) during October following two months of 0.5% gain. Total business sales rose a steady 0.3% (8.0% y/y). The inventory-to-sales ratio increased minimally to 1.35, but remained below its 1.43 peak early in 2016.
Retail inventories strengthened 0.8% (3.9% y/y) in October, following a 0.1% uptick. Auto inventories improved 1.1% (8.0% y/y) after a 0.5% rise. Non-auto retail inventories gained 0.7% (1.7% y/y) after two months of slight decline. General merchandise inventories increased 0.8% (1.2% y/y) after a 0.2% decline. In the department store sector, inventories improved 0.4% (-0.8% y/y), the same as in September. Building materials inventories gained 0.3% (7.0% y/y) after a 0.1% uptick, while clothing store inventories surged 1.0% (0.1% y/y) after a 0.1% slip. Inventories of furniture, electronics and appliances strengthened 2.8% (3.8% y/y) after two months of 0.8% increase. As reported earlier, wholesale inventories rose 0.8% (5.2% y/y) following a 0.7% increase. Factory sector inventories gained 0.1% (4.8% y/y) after a 0.6% improvement.
Retail sales increased 1.2% (6.0% y/y) during October following little change in the prior two months. Non-auto sales rose 1.1% (5.8% y/y), also following two months of little-change. Wholesale sector sales fell 0.2% (+9.5% y/y) after a 0.1% uptick. Shipments from the factory sector eased 0.1% (+8.3% y/y) following two months of 0.7% gain.
The overall business inventory-to-sales (I/S) ratio rose to 1.35 in October. The retail sector ratio also held steady at 1.44, but remained down sharply from the levels averaged during the prior two years. The non-auto I/S ratio also was unchanged at 1.18, its lowest level since early-2012. The ratio peaked at 1.29 early in 2016. The wholesale sector I/S ratio rose to 1.28, the highest level since March. The manufacturing sector I/S ratio held steady at 1.34 and remained near the three-year low.
The manufacturing and trade data are in Haver's USECON database.
| Manufacturing & Trade | Oct | Sep | Aug | Oct Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Business Inventories (% chg) | 0.6 | 0.5 | 0.5 | 5.1 | 3.5 | 1.8 | 1.7 |
| Retail | 0.8 | 0.1 | 0.6 | 3.9 | 2.4 | 4.1 | 4.9 |
| Retail excl. Motor Vehicles | 0.7 | -0.1 | -0.1 | 1.7 | 2.3 | 1.9 | 3.9 |
| Merchant Wholesalers | 0.8 | 0.7 | 0.9 | 6.9 | 3.6 | 2.2 | 1.2 |
| Manufacturing | 0.1 | 0.6 | 0.1 | 4.8 | 4.5 | -0.7 | -0.8 |
| Business Sales (% chg) | |||||||
| Total | 0.3 | 0.3 | 0.5 | 8.0 | 5.4 | -0.6 | -3.4 |
| Retail | 1.2 | -0.0 | -0.1 | 6.0 | 4.5 | 2.8 | 1.9 |
| Retail excl. Motor Vehicles | 1.1 | -0.0 | 0.1 | 5.8 | 4.9 | 2.0 | 0.4 |
| Merchant Wholesalers | -0.2 | 0.1 | 0.7 | 9.5 | 7.0 | -1.3 | -4.9 |
| Manufacturing | -0.1 | 0.7 | 0.7 | 8.3 | 4.7 | -3.0 | -6.3 |
| I/S Ratio | |||||||
| Total | 1.35 | 1.34 | 1.34 | 1.36 | 1.38 | 1.42 | 1.39 |
| Retail | 1.44 | 1.44 | 1.44 | 1.45 | 1.47 | 1.49 | 1.46 |
| Retail excl. Motor Vehicles | 1.18 | 1.18 | 1.18 | 1.23 | 1.24 | 1.28 | 1.27 |
| Merchant Wholesalers | 1.28 | 1.27 | 1.26 | 1.28 | 1.29 | 1.35 | 1.33 |
| Manufacturing | 1.34 | 1.34 | 1.34 | 1.37 | 1.37 | 1.41 | 1.39 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
